St George Bank v Hammer (No 3) - [2016] NSWSC 128

Supreme Court

New South Wales

Medium Neutral Citation: St George Bank v Hammer (No 3) [2016] NSWSC 128
Hearing dates: 26 November 2015
Decision date: 26 February 2016
Jurisdiction: Common Law
Before: Button J
Decision:
(1) The notice of motion of the defendant of 26 November 2015 is dismissed.
(2) The defendant must pay the costs of the plaintiff of the proceedings before me.

Catchwords: CIVIL – application to set aside default judgment – construction and interpretation of Uniform Civil Procedure Rules 2005 – whether lack of courtesy in litigation justifies the setting aside of a default judgment – whether principles about vitiation of assignment apply – unconscionability – whether the entry of default judgment constitutes a denial of natural justice – whether the presence of tenants prohibits a mortgagee taking possession of a property
Legislation Cited: Australian Securities and Investment Commission Act 2001 (Cth)
Civil Procedure Act 2005 (NSW)
Contracts Review Act 1980 (NSW)
Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth)
Uniform Civil Procedure Rules 2005 (NSW), rr 16.2, 16.2(1)(c), 16.2(2)(c), 16.3, 16.3(1A)(a), 16.3(1A)(b)
National Consumer Credit Protection Act 2009 (Cth), Sch 1
Real Property Act 1900 (NSW)
Cases Cited: Equuscorp Pty Ltd v Haxton [2012] HCA 7; 246 CLR 498
HomeSec Finance Express Pty Ltd v Richardson [2012] NSWSC 1375
Ling v Pan Pac Investment Pty Limited; Ling v Wu [2015] NSWSC 850
Magnate Projects Pty Ltd v Youma Constructions (No 2) Pty Ltd [2005] NSWCA 331
St George Bank v Hammer (No 2) [2015] NSWSC 953
Category: Principal judgment
Parties: St George Bank – A Division of Westpac Banking Corporation (Plaintiff/Respondent)
Michael Jon Hammer (Defendant/Applicant)
Representation:
Counsel:
L Gor (Plaintiff/Respondent)
P E King (Defendant/Applicant)
Solicitors:
Kemp Strang (Plaintiff/Respondent)
McKells (Defendant/Applicant)

File Number(s): 2014/190767

Judgment

This is an application by way of notice of motion to have set aside a default judgment obtained by the plaintiff, St George Bank a division of Westpac Banking Corporation, against the defendant, Mr Hammer. The application has a number of bases. For the following reasons, the application must be dismissed with costs.

Chronological background

A succinct statement of undisputed events that occurred before the matter came before me is as follows. It is derived from extensive affidavit material placed before me on the hearing of the motion.
On 8 January 2008, St George Bank lent the defendant a large sum of money that was secured by way of a mortgage over real property located in the Northern Rivers region of New South Wales. Some of the loaned funds were used to pay off a pre-existing loan. For a time, the defendant serviced the loan; eventually, in 2013, it fell into default.
On 27 June 2014, the plaintiff filed a statement of claim in this Court seeking possession of the real property pursuant to the mortgage. The pleading was in short and orthodox form.
After that, the defendant – who was at that stage acting for himself – filed a number of documents, and made a number of requests…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] NSWSC 128
Decision Date: 26 February 2016

CaseChat Overview and Summary

The case before the court involved St George Bank as the plaintiff and Hammer as the defendant. The dispute arose from a default judgment entered against Hammer, which the defendant sought to set aside. The matter was heard in the Supreme Court of New South Wales. Hammer argued that the bank's conduct during the litigation was so egregious that it warranted setting aside the default judgment. The bank, on the other hand, contended that the judgment should stand and that the defendant's application was without merit.

The central legal issues before the court were whether the bank's conduct during the litigation amounted to a lack of courtesy that justified setting aside the default judgment and whether the principles governing the vitiation of assignments could be applied to this situation. The court also needed to determine if the entry of the default judgment constituted a denial of natural justice and whether the presence of tenants on the property in question prevented the mortgagee from taking possession.

The court held that while the bank's conduct in the litigation could be characterised as lacking courtesy, this alone was not sufficient to warrant setting aside the default judgment. The court emphasised that the Uniform Civil Procedure Rules 2005 did not provide a basis for setting aside a default judgment on the grounds of unconscionability. Additionally, the principles applicable to the vitiation of assignments were not relevant in this context. The court also found that the entry of the default judgment did not constitute a denial of natural justice. Finally, the court held that the presence of tenants did not prohibit the mortgagee from taking possession of the property. The application to set aside the default judgment was dismissed.

The final orders of the court were that the application to set aside the default judgment was dismissed and that the defendant pay the plaintiff's costs of the application.

Orders